The post Crypto Lawyer John Deaton Calls for Coordination Against SEC’s Anti-Crypto Efforts appeared first on Coinpedia Fintech News
Crypto lawyer and XRP advocate, John Deaton, has taken to Twitter to assemble a group of companies and individuals who the SEC has claimed violated Section 5 of the Securities Act. Deaton is seeking those who issued, offered, or sold a token that the SEC believes satisfies the Howey test and is subject to investigative subpoenas or asked to settle prior to enforcement action.
Deaton clarified that he’s not looking for cases involving real fraud or scams that harmed investors. Instead, he’s interested in software code that the SEC claims are an investment contract, regardless of the seller or circumstances of the sale.
Coordinating Against Coordinated Efforts
In his tweets, the crypto lawyer pointed out that it would have been beneficial if Ripple and LBRY’s defense teams had communicated with each other. This comment comes as Gensler, the SEC chairman, beefs up the staff committed to crypto enforcement actions. According to Fox Business journalist, Eleanor Terrett, Gensler already doubled the staff designated for crypto last year.
Deaton and other XRP supporters see Ripple as the best chance for the United States crypto industry against the SEC’s adverse enforcement policy. LBRY, an open-source content distribution network, noted that other crypto players in the US could be playing offense but aren’t. As a result, it’s all on XRP to save the industry.
In light of the SEC’s actions, Deaton is calling for a coordinated effort to counter the anti-crypto push. With the SEC actively pursuing enforcement actions against crypto companies and individuals, it’s more crucial than ever to work together to defend the industry.
The SEC’s Definition of Investment Contracts
Deaton and other experts in the industry are concerned about the SEC’s interpretation of investment contracts, as evidenced by a current litigation example. The company involved asked the SEC to justify why the desire to use or consume the product sold is not an additive unique material value and under the sole control of the individual purchasers to create a justification for their purchase at the time of the purchase.
The SEC’s response claimed that if an alleged consumptive use is reversible or transitory, it is fully compatible with trading or exchange. An investor could “consume” a token purchased primarily or entirely for investment purposes without detracting from its investment potential. As a result, the SEC could claim that everything that has a potential market could become a security.